UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(AMENDMENT NO. 1)
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT 0F 1934
FOR THE YEAR ENDED DECEMBER 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OF THE
SECURITIES EXCHANGE ACT 0F 1934
For the transition period from _____________ to ___________
COMMISSION FILE NUMBER 1-9718
PNC BANK CORP.
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 25-1435979
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE PNC PLAZA
249 FIFTH AVENUE
PITTSBURGH, PENNSYLVANIA 15222-2707
(Address of principal executive offices)
(Zip Code)
(412) 762-1553
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report)
By filing this amendment ("Amendment No. 1"), the undersigned
registrant hereby amends its Annual Report on Form 10-K for the year
ended December 31, 1996 ("1996 Form 10-K"), to include, as permitted by
Rule 15d-21 under the Securities Exchange Act of 1934, as amended
("Exchange Act"), the financial statements and exhibits required by
Form 11-K with respect to the PNC Bank Corp. Incentive Savings Plan, as
amended ("PNC Plan") and the Midlantic Savings and Investment Plan, as
amended ("Midlantic Plan"). Effective January 1, 1997 the Midlantic
Plan merged with and into the PNC Plan.
In accordance with Rule 12b-15 of the Exchange Act, Item 14 of Part IV
of the 1996 Form 10-K is hereby amended and restated to read in its
entirety as follows:
PART IV
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
The following report of independent auditors of the Corporation and
consolidated financial statements, included in the Annual Report to
Shareholders at the page indicated, are incorporated herein by
reference.
PAGE OF
FINANCIAL STATEMENTS ANNUAL REPORT
---------------------------------------------------------------------------------------------------------------
Report of Ernst & Young LLP, Independent Auditors 47
Consolidated Statement of Income for the three years ended December 31, 1996 48
Consolidated Balance Sheet as of December 31, 1996 and 1995 49
Consolidated Statement of Changes in Shareholders' Equity for the three years ended
December 31, 1996 50
Consolidated Statement of Cash Flows for the three years ended December 31, 1996 51
Notes to Consolidated Financial Statements 52-68
Quarterly Selected Financial Data 70
As permitted by Rule 15d-21 of the Exchange Act, the following
financial statements of the PNC Plan and Midlantic Plan and reports of
independent auditors thereon are filed with Amendment No. 1 at the page
indicated.
PAGE OF AMENDMENT NO. 1
--------------------------------
FINANCIAL STATEMENTS PNC PLAN MIDLANTIC PLAN
---------------------------------------------------------------------------------------------------------------
Report of Independent Auditors 5 26
Statements of Net Assets Available for Plan Benefits 6 27
Statements of Changes in Net Assets Available for Plan Benefits 7 28
Notes to Financial Statements 8 29
Schedule of Assets Held for Investment 18 38
Schedule of Reportable Transactions 24 39
FINANCIAL STATEMENT SCHEDULES
----------------------------------------------------------------------
Not applicable.
REPORTS ON FORM 8-K
----------------------------------------------------------------------
The following reports on Form 8-K were filed during the quarter ended
December 31, 1996, or thereafter:
Form 8-K dated as of October 7, 1996, reporting a public offering of
6,000,000 shares by the Corporation of a newly authorized series of
Preferred Stock, filed pursuant to Item 5.
Form 8-K dated as of October 10, 1996, reporting the Corporation's
consolidated financial results for the three and nine months ended
September 30, 1996, filed pursuant to Item 5.
2
Form 8-K dated as of January 15, 1997, reporting the Corporation's
consolidated financial results for the three months and year ended
December 31, 1996, filed pursuant to Item 5.
EXHIBITS
-------------------------------------------------------------------
The exhibits listed on the Exhibit Index on pages 41 and 42 of this
Form 10-K/A are filed herewith or are incorporated herein by
reference.
3
PNC Bank Corp.
Incentive Savings Plan
Audited Financial Statements
Years ended December 31, 1996 and 1995
CONTENTS
Report of Independent Auditors ...................................... 5
Audited Financial Statements
Statements of Net Assets Available for Plan Benefits................. 6
Statements of Changes in Net Assets Available for Plan .............. 7
Notes to Financial Statements ....................................... 8
Schedules
Schedule of Assets Held for Investment .............................. 18
Schedule of Reportable Transactions ................................. 24
4
REPORT OF INDEPENDENT AUDITORS
Administrative Committee
PNC Bank Corp.
Incentive Savings Plan
We have audited the accompanying statements of net assets available for plan
benefits of the PNC Bank Corp. Incentive Savings Plan (Plan) as of December 31,
1996 and 1995, and the related statements of changes in net assets available
for plan benefits for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan
at December 31, 1996 and 1995, and the changes in its net assets available for
plan benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules
of assets held for investment as of December 31, 1996, and reportable
transactions for the year ended December 31, 1996, are presented for purposes
of complying with the Department of Labor's Rules and Regulations for Reporting
and Disclosure under the Employee Retirement Income Security Act of 1974, and
are not a required part of the basic financial statements. The supplemental
schedules have been subjected to the auditing procedures applied in our audit
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
June 25, 1997
5
PNC Bank Corp.
Incentive Savings Plan
Statements of Net Assets Available for Plan Benefits
DECEMBER 31
1996 1995
-------------------------------------
ASSETS
Investments at fair value:
PNC Bank Corp. common stock (1996
cost--$248,214,481; 1995 cost--$258,667,697) $462,310,868 $411,707,599
PNC Bank Corp. preferred stock (1996 cost--$7,080;
1995 cost--$8,247) 42,607 42,224
Short-term investment funds (1996 cost--$65,444,777;
1995 cost--$67,302,448) 65,444,777 67,302,448
Registered investment companies (1996 cost--
$185,152,570; 1995 cost--$147,451,321) 201,377,398 161,214,839
Participant loans, at current outstanding principal
balance 27,423,234 22,417,465
Other (1996 cost--$355,177) 329,144 -
-------------------------------------
Total investments 756,928,028 662,684,575
Contribution receivable 1,669,984 1,137,814
Accrued income 321,061 342,424
Other accruals 1,023,084 3,341,963
-------------------------------------
Total assets 759,942,157 667,506,776
LIABILITIES
ESOP note payable to PNC Bank Corp. 67,700,000 84,600,000
Accrued interest payable 2,139,443 2,474,860
-------------------------------------
Net assets available for plan benefits $690,102,714 $580,431,916
=====================================
See accompanying notes.
6
PNC Bank Corp.
Incentive Savings Plan
Statements of Changes in Net Assets Available for Plan Benefits
YEAR ENDED DECEMBER 31
Additions: 1996 1995
----------------------------------------
Investment income:
Interest $ 5,177,885 $ 6,521,484
Dividends:
PNC Bank Corp. 17,926,106 18,717,784
Other 17,173,609 9,700,904
----------------------------------------
40,277,600 34,940,172
Contributions (employer):
Cash 12,298,198 9,461,406
PNC Bank Corp. Common Stock - 5,081,098
Contributions (employee) 28,243,234 26,821,384
----------------------------------------
Total additions 80,819,032 76,304,060
Deductions:
Payments to participants or beneficiaries 50,052,313 51,796,135
ESOP note interest expense 4,309,434 4,949,720
----------------------------------------
Total deductions 54,361,747 56,745,855
Net realized and unrealized appreciation
in fair value of investments 75,699,053 160,333,717
Net assets received in mergers/divestitures 7,514,460 12,305,278
----------------------------------------
Net increase 109,670,798 192,197,200
Net assets available for plan benefits at beginning
of year 580,431,916 388,234,716
----------------------------------------
Net assets available for plan benefits at end of year $690,102,714 $580,431,916
========================================
See accompanying notes.
7
PNC Bank Corp.
Incentive Savings Plan
Notes to Financial Statements
December 31, 1996
1. SIGNIFICANT ACCOUNTING POLICIES
VALUATION
Marketable securities are stated at fair value. Securities are valued at the
last public sale price of the securities listed on the New York Stock Exchange.
If no sales were reported, and in the case of securities traded over the
counter, the last bid price at the close of business is used. The value of any
security not listed or quoted on any exchange is determined by the last closing
bid price, reference to the bid price of any published quotations in common
use, or by the quotation of a reputable broker. For certain investments that do
not have an established fair value, such value is established based on the
opinion of the trustee.
The fair value of the participation units in the short-term investment funds
and registered investment companies are based on quoted redemption values on
the last business day of the plan year. Loans are valued at the amount of
principal outstanding.
The Plan's assets are concentrated in the stock and bond markets. Realization
of the respective values shown on the Statements of Net Assets Available for
Plan Benefits is subject to the results of these markets.
The preparation of financial statements, in conformity with generally accepted
accounting principles, requires management to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying
notes. Actual results may differ from such estimates and such differences may
be material to the financial statements.
2. DESCRIPTION OF THE PLAN
PNC Bank Corp. (PNC Bank) is the sponsor of the Incentive Savings Plan ("PNC
Plan"). The Plan covers substantially all eligible salaried employees of PNC
Bank and certain subsidiaries.
8
PNC Bank Corp.
Incentive Savings Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
The PNC Plan allows participants to contribute from 1 to 15 percent of their
biweekly base compensation on a pretax 401(k) basis. PNC Bank matches 100
percent of employee contributions up to 6 percent of base compensation, subject
to Internal Revenue Service (IRS) limitations. Participants are fully vested in
their balances, including the employer contributions. PNC Plan income is
allocated to participants based on an average participant investment balance on
a quarterly basis.
Participants in the PNC Plan may invest any voluntary contributions and balances
rolled over from any prior plans in any of four investment options: Fund A (an
equity fund), Fund B (an intermediate-term income fund), Fund C (a short-term
fixed income fund), and Fund D (PNC Bank Corp. common stock fund). At December
31, total participants in each fund were as follows:
1996 1995
-----------------------
Fund A 10,118 10,433
Fund B 7,668 8,610
Fund C 8,483 9,654
Fund D 14,279 15,597
Employer matching contributions for participants whose age is 55 years or under
are made in PNC Bank Common Stock. Participants over age 55 can choose to have
their matching contribution made in PNC Bank Corp. Common Stock or in cash to
invest in the other three funds.
Benefits to participants for withdrawals requested but yet to be paid were
$17,096,542 and $9,821,077 at December 31, 1996 and 1995, respectively.
The PNC Plan has a loan feature that allows participants to borrow against their
balance in accordance with the loan policies established by the Administrative
Committee. Such borrowings are reflected in the Loan Fund. At December 31, 1996,
the PNC Plan was committed to fund approximately $3.7 million in participant
loans, of which approximately $1.5 million represents existing loan refinances.
Under certain circumstances, the PNC Plan permits withdrawals by participants.
Although it has not expressed an interest to do so, PNC Bank has the right under
the PNC Plan to discontinue contributions at any time and to terminate the PNC
Plan subject to the provisions of the Employee Retirement Income Security Act of
1974 (ERISA).
9
PNC Bank Corp.
Incentive Savings Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
The PNC Plan includes a leveraged employee stock ownership plan (ESOP). In
September 1989, the ESOP borrowed $140 million from PNC Bank and purchased
approximately 7,350,000 shares of PNC Bank Common Stock through open market
purchases. The unallocated shares of PNC Bank Common Stock are pledged as
security on the ESOP note. The ESOP shares are used to match a portion of PNC
Bank's matching contributions to the PNC Plan.
PNC Bank is obligated to make annual contributions sufficient to fund principal
and interest payments on the ESOP note net of investment income and realized
gains and losses in the unallocated ESOP fund. Shares of PNC Bank Common Stock
allocated to participants totaled 640,782 in 1996 and 743,277 in 1995.
The effective interest rate on the ESOP fixed rate notes was 5.13% in 1996.
Principal payments are due on an annual basis and interest payments are due on
a semiannual basis. The following is a schedule of debt maturities:
1997 $20,100,000
1998 23,900,000
1999 23,700,000
-----------
$67,700,000
===========
At December 31, 1996, the ESOP held 3,184,324 unallocated shares of PNC Bank
Common Stock with a market value of $119,810,191 and $2,160,954 in short-term
investment funds. These assets will be used to match future participant
contributions.
3. INVESTMENTS
The PNC Plan is comprised of investment funds representing both the employer's
and the participants' contributions. Records are maintained to account for the
noncontributory and the voluntary portion of each fund.
10
PNC Bank Corp.
Incentive Savings Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
Net realized and unrealized appreciation in aggregate fair value of securities
was as follows:
NET REALIZED AND UNREALIZED
APPRECIATION IN FAIR
VALUE FOR THE
YEAR ENDED DECEMBER 31
1996 1995
-------------------------------------
PNC Bank Corp. common stock $66,279,669 $139,580,381
PNC Bank Corp. preferred stock 8,729 12,586
Registered investment companies 9,410,655 20,740,750
------------ ------------
$75,699,053 $160,333,717
============ ============
The fair values of individual investments that represent 5 percent or
more of the PNC Plan's net assets are as follows:
DECEMBER 31
1996 1995
--------------------------------------
PNC Bank Corp. common stock $462,310,868 $411,707,599
PNC Money Market Portfolio 65,444,777 67,302,448
PNC Managed Income Fund - 31,003,125
PNC Core Equity Portfolio Fund - 29,285,309
11
PNC Bank Corp.
Incentive Savings Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The net assets available for plan benefits for PNC Plan's investment funds were
as follows:
INTERMEDIATE-
TERM FIXED SHORT-TERM PNC BANK
EQUITY INCOME-- FIXED INCOME CORP. STOCK
FUND A FUND B --FUND C --FUND D
---------------------------------------------------------------
December 31, 1996
- -----------------
Investments at fair value:
PNC Bank common stock $ - $ - $ - $214,097,952
PNC Bank preferred stock - - - 42,607
Short-term investments Compass
Capital Funds:
Money Market Portfolio 3,608,542 1,269,510 55,791,123 1,270,280
Registered investment companies PNC
Funds:
Small Cap Growth Equity Portfolio 5,915,193 - - -
International Equity Portfolio 30,722,695 - - -
Small Cap Value Equity Portfolio 5,851,453 - - -
International Emerging Markets
Portfolio 7,252,467 - - -
Growth Equity Portfolio 28,051,743 - - -
Mid Cap Growth Equity Portfolio 8,734,800 - - -
Mid Cap Value Equity Portfolio 8,700,000 - - -
Intermediate Term Bond Portfolio - 20,412,876 - -
Managed Income Portfolio - 32,755,855 - -
Core Equity Portfolio 28,136,804 - - -
Value Equity Portfolio 24,843,512 - - -
Participant loans - - - -
Other - 329,144 - -
---------------------------------------------------------------
Total investments 151,817,209 54,767,385 55,791,123 215,410,839
Contribution receivable - - - -
Accrued income 14,716 9,334 246,281 4,858
Due to (from) fund/other assets
(liabilities) 4,264,879 640,824 4,432,342 2,939,006
---------------------------------------------------------------
Total assets 156,096,804 55,417,543 60,469,746 218,354,703
ESOP note payable - - - -
Accrued interest payable - - - -
---------------------------------------------------------------
Net assets available for plan benefits $156,096,804 $55,417,543 $60,469,746 $218,354,703
===============================================================
PNC PNC
BANK CORP. BANK CORP.
ALLOCATED UNALLOCATED LOAN
ESOP FUND ESOP FUND FUND TOTAL
---------------------------------------------------------------
December 31, 1996
- -----------------
Investments at fair value:
PNC Bank common stock $128,402,725 $119,810,191 $ - $462,310,868
PNC Bank preferred stock - - - 42,607
Short-term investments Compass
Capital Funds:
Money Market Portfolio 1,082,118 2,160,954 262,250 65,444,777
Registered investment companies PNC
Funds:
Small Cap Growth Equity Portfolio - - - 5,915,193
International Equity Portfolio - - - 30,722,695
Small Cap Value Equity Portfolio - - - 5,851,453
International Emerging Markets
Portfolio - - - 7,252,467
Growth Equity Portfolio - - - 28,051,743
Mid Cap Growth Equity Portfolio - - - 8,734,800
Mid Cap Value Equity Portfolio - - - 8,700,000
Intermediate Term Bond Portfolio - - - 20,412,876
Managed Income Portfolio - - - 32,755,855
Core Equity Portfolio - - - 28,136,804
Value Equity Portfolio - - - 24,843,512
Participant loans - - 27,423,234 27,423,234
Other - - - 329,144
---------------------------------------------------------------
Total investments 129,484,843 121,971,145 27,685,484 756,928,028
Contribution receivable 1,669,984 - - 1,669,984
Accrued income 28,843 15,812 1,217 321,061
Due to (from) fund/other assets
(liabilities) 435,601 (7,710,115) (3,979,453) 1,023,084
---------------------------------------------------------------
Total assets 131,619,271 114,276,842 23,707,248 759,942,157
ESOP note payable - (67,700,000) - (67,700,000)
Accrued interest payable - (2,139,443) - (2,139,443)
---------------------------------------------------------------
Net assets available for plan benefits $131,619,271 $ 44,437,399 $23,707,248 $690,102,714
===============================================================
12
PNC Bank Corp.
Incentive Savings Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The net assets available for plan benefits for PNC Plan's investment funds were
as follows:
INTERMEDIATE-
TERM FIXED SHORT-TERM PNC BANK
EQUITY INCOME-- FIXED INCOME CORP. STOCK
FUND A FUND B --FUND C --FUND D
---------------------------------------------------------------
December 31, 1995
- -----------------
Investments at fair value:
PNC Bank common stock $ - $ - $ - $194,709,309
PNC Bank preferred stock - - - 42,224
Short-term investments PNC Funds:
Money Market Portfolio 4,015,003 1,625,480 55,358,999 -
Registered investment companies PNC
Funds:
Small Cap Growth Equity Portfolio 7,672,930 - - -
International Equity Portfolio 22,319,064 - - -
Small Cap Value Equity Portfolio 6,810,828 - - -
International Emerging Markets
Portfolio 4,185,333 - - -
Growth Equity Portfolio 17,151,237 - - -
Intermediate Term Bond Portfolio - 18,139,072 - -
Managed Income Portfolio - 31,003,125 - -
Core Equity Portfolio 29,285,309 - - -
Value Equity Portfolio 24,647,941 - - -
Participant loans - - - -
---------------------------------------------------------------
Total investments 116,087,645 50,767,677 55,358,999 194,751,533
Contribution receivable - - - 1,137,814
Accrued income 15,671 6,081 261,423 9,757
Due to (from) fund/other assets
(liabilities) 1,662,421 (208,921) 846,119 533,718
---------------------------------------------------------------
Total assets 117,765,737 50,564,837 56,466,541 196,432,822
ESOP note payable - - - -
Accrued interest payable - - - -
---------------------------------------------------------------
Net assets available for plan benefits $117,765,737 $50,564,837 $56,466,541 $196,432,822
===============================================================
PNC PNC
BANK CORP. BANK CORP.
ALLOCATED UNALLOCATED LOAN
ESOP FUND ESOP FUND FUND TOTAL
--------------------------------------------------------------
December 31, 1995
- -----------------
Investments at fair value:
PNC Bank common stock $93,638,621 $123,359,669 $ $411,707,599
PNC Bank preferred stock - - - 42,224
Short-term investments PNC Funds:
Money Market Portfolio 5,123,759 678,245 500,962 67,302,448
Registered investment companies PNC
Funds:
Small Cap Growth Equity Portfolio - - - 7,672,930
International Equity Portfolio - - - 22,319,064
Small Cap Value Equity Portfolio - - - 6,810,828
International Emerging Markets
Portfolio - - - 4,185,333
Growth Equity Portfolio - - - 17,151,237
Intermediate Term Bond Portfolio - - - 18,139,072
Managed Income Portfolio - - - 31,003,125
Core Equity Portfolio - - - 29,285,309
Value Equity Portfolio - - - 24,647,941
Participant loans - - 22,417,465 22,417,465
---------------------------------------------------------------
Total investments 98,762,380 124,037,914 22,918,427 662,684,575
Contribution receivable - - - 1,137,814
Accrued income 20,207 26,671 2,614 342,424
Due to (from) fund/other assets
(liabilities) (1,663,861) 2,172,487 - 3,341,963
---------------------------------------------------------------
Total assets 97,118,726 126,237,072 22,921,041 667,506,776
ESOP note payable - (84,600,000) - (84,600,000)
Accrued interest payable - (2,474,860) - (2,474,860)
--------------------------------------------------------------
Net assets available for plan benefits $97,118,726 $ 39,162,212 $22,921,041 $580,431,916
==============================================================
13
PNC Bank Corp.
Incentive Savings Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The changes in net assets available for plan benefits for PNC Plan's investment
funds were as follows:
INTERMEDIATE-
TERM FIXED SHORT-TERM PNC BANK
EQUITY INCOME-- FIXED INCOME CORP. STOCK
FUND A FUND B --FUND C --FUND D
-------------------------------------------------------------------
Year ended December 31, 1996
- ----------------------------
Net assets available for plan
benefits at January 1, 1996 $117,765,737 $50,564,837 $56,466,541 $196,432,822
Additions:
Interest and dividends 14,223,180 3,117,454 2,986,829 8,485,432
Contributions:
Employer 388,627 210,492 334,080 -
Employee 12,168,014 4,732,087 4,339,927 5,962,823
Rollover 621,723 174,936 117,984 125,740
Deductions:
Payments to participants or
beneficiaries (10,373,636) (4,327,773) (7,096,642) (18,739,547)
Net transfers 9,393,905 363,674 1,066,451 (8,850,524)
ESOP activity:
Interest expense - - - -
Other ESOP activity - - - 274,593
Net realized and unrealized
appreciation (depreciation) 10,559,150 (1,148,495) - 31,567,066
Net assets received in mergers
(divestitures) 1,350,104 1,730,331 2,254,577 3,096,298
-------------------------------------------------------------------
Net assets available for plan
benefits at December 31, 1996 $156,096,804 $55,417,543 $60,469,746 $218,354,703
===================================================================
PNC PNC
BANK CORP. BANK CORP.
ALLOCATED UNALLOCATED LOAN
ESOP FUND ESOP FUND FUND TOTAL
-------------------------------------------------------------- -
Year ended December 31, 1996
- ----------------------------
Net assets available for plan
benefits at January 1, 1996 $ 97,118,726 $39,162,212 $22,921,041 $580,431,916
Additions:
Interest and dividends 4,468,745 5,111,344 1,884,616 40,277,600
Contributions:
Employer - 11,365,000 - 12,298,198
Employee - - - 27,202,851
Rollover - - - 1,040,383
Deductions:
Payments to participants or
beneficiaries (9,177,493) - (337,222) (50,052,313)
Net transfers (1,013,995) - (959,511) -
ESOP activity:
Interest expense - (4,309,434) - (4,309,434)
Other ESOP activity 22,536,507 (22,811,100) - -
Net realized and unrealized
appreciation (depreciation) 18,801,955 15,919,377 - 75,699,053
Net assets received in mergers
(divestitures) (1,115,174) - 198,324 7,514,460
--------------------------------------------------------------
Net assets available for plan
benefits at December 31, 1996 $131,619,271 $44,437,399 $23,707,248 $690,102,714
==============================================================
14
PNC Bank Corp.
Incentive Savings Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The changes in net assets available for plan benefits for PNC Plan's investment
funds were as follows:
INTERMEDIATE-
TERM FIXED SHORT-TERM PNC BANK
EQUITY INCOME-- FIXED INCOME CORP. STOCK
FUND A FUND B --FUND C --FUND D
------------------------------------------------------------------
Year ended December 31, 1995
- ----------------------------
Net assets available for plan
benefits at January 1, 1995 $84,844,684 $41,241,523 $56,055,165 $128,538,629
Additions:
Interest and dividends 7,078,293 3,393,605 3,301,774 8,115,915
Contributions:
Employer 337,875 234,303 364,228 5,081,098
Employee 10,853,233 5,054,317 4,968,154 5,945,680
Deductions:
Payments to participants or
beneficiaries (9,401,501) (5,443,852) (9,734,173) (16,950,926)
Net transfers 3,264,705 565,126 (1,889,202) (1,724,997)
ESOP activity:
Interest expense - - - -
Other ESOP activity - - - (2,666,394)
Net realized and unrealized
appreciation 17,252,318 3,488,432 - 66,770,788
Net assets received in mergers 3,536,130 2,031,383 3,400,595 3,323,029
------------------------------------------------------------------
Net assets available for plan
benefits at December 31, 1995 $117,765,737 $50,564,837 $56,466,541 $196,432,822
==================================================================
PNC PNC
BANK CORP. BANK CORP.
ALLOCATED UNALLOCATED LOAN
ESOP FUND ESOP FUND FUND TOTAL
--------------------------------------------------------------
Year ended December 31, 1995
- ----------------------------
Net assets available for plan
benefits at January 1, 1995 $58,971,446 $ (6,388,673) $24,971,942 $388,234,716
Additions:
Interest and dividends 3,755,857 7,643,759 1,650,969 34,940,172
Contributions:
Employer - 8,525,000 - 14,542,504
Employee - - - 26,821,384
Deductions:
Payments to participants or
beneficiaries (6,547,113) - (3,718,570) (51,796,135)
Net transfers (1,533,238) 1,315,047 2,559 -
ESOP activity:
Interest expense - (4,949,720) - (4,949,720)
Other ESOP activity 10,336,081 (7,669,687) - -
Net realized and unrealized
appreciation 32,135,693 40,686,486 - 160,333,717
Net assets received in mergers - - 14,141 12,305,278
--------------------------------------------------------------
Net assets available for plan
benefits at December 31, 1995 $97,118,726 $39,162,212 $22,921,041 $580,431,916
==============================================================
15
PNC Bank Corp.
Incentive Savings Plan
Notes to Financial Statements (continued)
4. TRANSACTIONS WITH PARTIES-IN-INTEREST
The asset management group of PNC Bank, N.A., a wholly owned indirect subsidiary
of PNC Bank, administers the plan assets, maintains discretionary investment
power, and is the safekeeping agent. PNC Bank pays administrative costs incurred
by the PNC Plan. The asset management group of PNC Bank, Ohio, N.A., a wholly
owned indirect subsidiary of PNC Bank, administers the ESOP assets of the PNC
Plan. The PNC Plan also holds shares of registered investment companies (Compass
Capital Funds, formerly PNC Funds) which are sponsored and administered by
wholly owned subsidiaries of PNC Bank or its subsidiaries.
5. INCOME TAX STATUS
The Internal Revenue Service ruled June 21, 1995 that the PNC Plan qualifies
under Section 401(a) of the Internal Revenue Code (IRC) and, therefore, the
related trust is not subject to tax under present income tax law. Once
qualified, the PNC Plan is required to operate in conformity with the IRC to
maintain its qualification. The Plan Administrator is not aware of any course of
action or series of events that have occurred that might adversely affect PNC
Plan's qualified status.
6. PLAN MERGERS AND DIVESTITURES
In 1996, defined contribution plans for Chemical Bank NJ, N.A. and Project
Management Systems were merged into the Plan, with assets of $14,000,000 and
$225,000, respectively.
As of July 1, 1996, a new defined contribution plan, known as the PNC
Retirement Savings Plan, was developed for employees of PNC Mortgage Corp. of
America, a wholly owned indirect subsidiary of PNC Bank, and its related
affiliates. These employees were previously eligible to participate in the
Incentive Savings Plan. Assets previously invested through the Incentive
Savings Plan were transferred to the PNC Retirement Savings Plan for all
applicable employees who did not meet the grandfathering requirements set forth
by the plan and those grandfathered employees who elected to participate in the
PNC Retirement Savings Plan. As participants are not permitted to contribute to
both plans, all contributions subsequent to June 30, 1996, are included in the
PNC Retirement Savings Plan assets. Approximately $7.1 million in assets held
for 2,246 participants were transferred from the PNC Plan to the PNC Retirement
Savings Plan effective July 1, 1997.
16
PNC Bank Corp.
Incentive Savings Plan
Notes to Financial Statements (continued)
7. SUBSEQUENT EVENT
On January 1, 1997, The Midlantic Savings and Investment Plan, a defined
contribution plan, was merged into the PNC Plan, adding approximately 3,500 new
participants and assets totaling $85 million.
17
PNC Bank Corp.
Incentive Savings Plan
Schedule of Assets Held for Investment
December 31, 1996
IDENTITY OF ISSUE, BORROWER, DESCRIPTION OF
OR SIMILAR ENTITY INVESTMENT COST FAIR VALUE
- -----------------------------------------------------------------------------------------------------
EQUITY--FUND A
Registered Investment Companies
- -------------------------------
Compass Capital Funds--Small Cap
Growth Equity Portfolio
Fund 093 Institutional Class 299,655 shares $ 3,664,613 $ 5,915,193
Compass Capital Funds--International
Equity Portfolio Fund 065
Institutional Class 2,331,009 shares 30,113,880 30,722,695
Compass Capital Funds--Small Cap
Value Equity Portfolio Fund 046
Institutional Class 386,490 shares 5,392,195 5,851,453
Compass Capital Funds--International
Emerging Markets
Portfolio Fund 015
Institutional Class 838,436 shares 7,056,755 7,252,467
Compass Capital Funds--Growth
Equity Portfolio Fund 029
Institutional Class 1,899,238 shares 22,329,085 28,051,743
Compass Capital Funds--Core
Equity Portfolio Fund 095
Institutional Class 1,832,117 shares 22,110,735 24,843,512
18
Schedule of Assets Held for Investment (continued)
IDENTITY OF ISSUE, BORROWER, DESCRIPTION OF
OR SIMILAR ENTITY INVESTMENT COST FAIR VALUE
- -----------------------------------------------------------------------------------------------------
Compass Capital Funds--Value
Equity Portfolio Fund 089
Institutional Class 1,984,260 shares $ 24,839,414 $ 28,136,804
Compass Capital Funds--Mid Cap
Growth Equity Portfolio Fund 044
Institutional Class 870,000 shares 8,700,000 8,734,800
Compass Capital Funds--Mid Cap
Equity Portfolio Fund 035
Institutional Class 870,000 shares 8,700,000 8,700,000
Interest-Bearing Cash
- ---------------------
Compass Capital Money Market
Institutional Class 3,608,542 shares 3,608,542 3,608,542
------------------------------------
Total Equity--Fund A $136,515,219 $151,817,209
19
Schedule of Assets Held for Investment (continued)
IDENTITY OF ISSUE, BORROWER, DESCRIPTION OF
OR SIMILAR ENTITY INVESTMENT COST FAIR VALUE
- -----------------------------------------------------------------------------------------------------
INTERMEDIATE-TERM FIXED
INCOME--FUND B
Registered Investment Companies
- -------------------------------
Compass Capital Funds--Intermediate
Term Bond Portfolio
Fund 090 Institutional Class 2,171,583 shares $ 20,054,901 $ 20,412,876
Compass Capital Funds--Managed
Income Portfolio Fund 013
Institutional Class 3,192,579 shares 32,190,992 32,755,855
Interest-Bearing Cash
- ---------------------
PNC Money Market
Institutional Class 1,269,510 shares 1,269,510 1,269,510
Other 234,303 shares 355,177 329,144
- ----- ------------------------------------
Total Intermediate-Term Fixed
Income--Fund B $ 53,870,580 $ 54,767,385
20
Schedule of Assets Held for Investment (continued)
IDENTITY OF ISSUE, BORROWER, DESCRIPTION OF
OR SIMILAR ENTITY INVESTMENT COST FAIR VALUE
- ------------------------------------------------------------------------------------------------------
SHORT-TERM FIXED INCOME--FUND C
Interest-Bearing Cash
- ---------------------
PNC Money Market
Institutional Class 55,791,123 shares $ 55,791,123 $ 55,791,123
PNC BANK CORP. STOCK--FUND D
Common Stock
- ------------
PNC Bank Corp. 5,690,311 shares 121,997,222 214,097,952
Preferred Stock
- ---------------
PNC Bank Corp. 679 shares 7,080 42,607
Interest-Bearing Cash
- ---------------------
PNC Money Market
Institutional Class 1,270,280 shares 1,270,280 1,270,280
-----------------------------------
Total PNC Bank Corp. Stock--
Fund D $ 123,274,582 $ 215,410,839
21
Schedule of Assets Held for Investment (continued)
IDENTITY OF ISSUE, BORROWER, DESCRIPTION OF
OR SIMILAR ENTITY INVESTMENT COST FAIR VALUE
- ------------------------------------------------------------------------------------------------------
ESOP ACCOUNT
Common Stock
- ------------
PNC Bank Corp:
Allocated Account 3,412,697 shares $ 65,938,401 $128,402,725
Unallocated Account 3,184,324 shares 60,278,858 119,810,191
Interest-Bearing Cash
- ---------------------
PNC Money Market
Institutional Class 3,243,072 shares 3,243,072 3,243,072
-------------------------------------
Total ESOP Account $ 129,460,331 $251,455,988
22
Schedule of Assets Held for Investment (continued)
IDENTITY OF ISSUE, BORROWER, DESCRIPTION OF
OR SIMILAR ENTITY INVESTMENT COST FAIR VALUE
- ------------------------------------------------------------------------------------------------------
LOAN FUND
Installment Loans
- -----------------
March 1992 through December 1996; rates
ranging from 6.00% to 10.00%; maturing
January 1, 1997 through January 17,
2002
$ 24,299,686 $ 24,299,686
Mortgage Loans
January 1989 through December 1996;
rates ranging from 6.00% to 11.50%;
maturing January 1, 1997 through
January 19, 2012
3,123,548 3,123,548
-------------------------------------
27,423,234 27,423,234
PNC Money Market
Institutional Class 378,090 shares 262,250 262,250
-------------------------------------
Total Loan Fund 27,685,484 27,685,484
-------------------------------------
Total PNC Bank Corp.
Incentive Savings Plan $526,597,319 $756,928,028
=====================================
23
PNC Bank Corp.
Incentive Savings Plan
Schedule of Reportable Transactions
Year ended December 31, 1996
FAIR VALUE
COST OF ASSETS ON NET
PURCHASE SELLING OF TRANSACTION GAIN
DESCRIPTION OF ASSETS PRICE PRICE ASSETS DATE (LOSS)
- ----------------------------------------------------------------------------------------------------------------
Category (iii)--Series of securities transactions
- -------------------------------------------------
PNC Money Market Portfolio #1 Institutional Class
-------------------------------------------------
122,982,289 shares $122,982,289 $ -- $122,982,289 $122,982,289 $ --
125,838,253 shares -- 125,838,253 125,838,253 125,838,253 --
PNC Bank Corp. Common Stock
---------------------------
922,708 shares 28,742,051 -- 28,742,051 28,742,051 --
629,352 shares -- 19,815,752 13,094,578 19,815,752 6,721,174
There were no category (i), (ii) or (iv) reportable transactions during 1996.
24
Midlantic Savings and Investment Plan
Audited Financial Statements
CONTENTS
Report of Independent Auditors ..........................................26
Audited Financial Statements
Statements of Net Assets Available for Plan Benefits as of
December 31, 1996 and 1995.............................................27
Statements of Changes in Net Assets Available for Plan Benefits
for the years ended December 31, 1995..................................28
Notes to Financial Statements............................................29
Schedules
Schedule of Assets Held for Investment ..................................38
Schedule of Reportable Transactions .....................................39
25
Report of Independent Auditors
Administrative Committee
Midlantic Savings and Investment Plan
We have audited the accompanying statements of net assets available for plan
benefits of the Midlantic Savings and Investment Plan (Plan) as of December 31,
1996 and 1995, and the related statements of changes in net assets available
for plan benefits for the years then ended. These financial statements are the
responsibility of the Plan s management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 1996 and 1995, and the changes in its net assets available for
benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules
of assets held for investment as of December 31, 1996, and reportable
transactions for the year ended December 31, 1996, are presented for purposes
of complying with the Department of Labor s Rules and Regulations for Reporting
and Disclosure under the Employee Retirement Income Security Act of 1974, and
are not a required part of the basic financial statements. The supplemental
schedules have been subjected to the auditing procedures applied in our audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
June 23, 1997
Pittsburgh, Pennsylvania
26
Midlantic Savings and Investment Plan
Statements of Net Assets Available for Plan Benefits
DECEMBER 31
1996 1995
-----------------------------------
ASSETS
Investments at fair value:
PNC Bank Corp. common stock (1996 cost--$17,744,532; 1995
cost--$20,937,356) $ 49,354,479 $53,231,585
Registered investment companies:
Compass Capital Funds
Growth Equity Portfolio (1996 cost--$8,614,756; 1995
cost--$8,052,737) 10,582,043 9,443,510
Core Bond Portfolio (1996 cost--$5,496,448; 1995
cost--$5,722,767) 5,529,284 5,973,714
Money Market Portfolio (1996 cost--$11,983,158; 1995
cost--$9,472,135) 11,983,158 9,472,135
Value Equity Portfolio (1996 cost--$15,201,346; 1995
cost--$10,801,479) 15,103,894 11,808,394
Short Government Bond Portfolio (1996 cost--$4,376,242;
1995 cost--$4,798,846) 4,389,764 4,855,079
Balanced Portfolio (1996 cost--$1,257,948; 1995
cost--$830,672) 1,339,985 879,741
-----------------------------------
Total investments 98,282,607 95,664,158
Dividends receivable 906,741 -
Employer contribution receivable 1,195,571 -
Due from broker for securities sold 1,114,035 656,342
Accrued income 53,211 10,431
-----------------------------------
Total assets 101,552,165 96,330,931
LIABILITIES
Due to broker for securities purchased - 1,719,905
-----------------------------------
Net assets available for plan benefits $101,552,165 $94,611,026
===================================
See accompanying notes.
27
Midlantic Savings and Investment Plan
Statements of Changes in Net Assets Available for Plan Benefits
YEAR ENDED DECEMBER 31
1996 1995
------------------------------------
Additions:
Investment income:
Interest $ 659,848 $ 403,084
Dividends:
PNC Bank Corp. 2,170,902 1,001,430
Other 927,099 717,339
------------------------------------
3,757,849 2,121,853
Contributions (employer) 4,181,232 5,186,082
Contributions (employee and rollover) 6,312,902 7,080,721
Net transfers from other plans 719,471 -
------------------------------------
Total additions 14,971,454 14,388,656
Deductions:
Payments to participants or beneficiaries 19,585,288 4,632,538
Administrative expense - 35,654
------------------------------------
Total deductions 19,585,288 4,668,192
Net miscellaneous disbursements - (203)
Net realized and unrealized appreciation in fair value of
investments 11,554,973 37,787,302
------------------------------------
Net increase 6,941,139 47,507,563
Net assets available for plan benefits at beginning of year 94,611,026 47,103,463
------------------------------------
Net assets available for plan benefits at end of year $101,552,165 $94,611,026
====================================
See accompanying notes.
28
Midlantic Savings and Investment Plan
Notes to Financial Statements
December 31, 1996
1. DESCRIPTION OF THE PLAN
Effective December 31, 1995, Midlantic Corporation was merged into a wholly
owned subsidiary of PNC Bank Corp. and all outstanding common shares of
Midlantic Corporation common stock were exchanged for 2.05 shares of PNC Bank
Corp. common stock. The subsidiaries of the former Midlantic Corporation are now
wholly owned indirect subsidiaries of PNC Bank Corp. Concurrent with the merger,
PNC Bank Corp. became the sponsor of the Midlantic Savings and Investment Plan
("Midlantic Plan"). Prior to the merger, the Midlantic Plan sponsor was
Midlantic Corporation.
The Midlantic Plan covers substantially all eligible employees of the former
Midlantic Corporation and subsidiaries. Employees are eligible on the first day
of the month coinciding with, or immediately following, the date on which three
continuous months of service are completed.
The Midlantic Plan allows participants to contribute from 1 to 15 percent of
their compensation on a pretax 401(k) basis. The Midlantic Plan sponsor matches
100 percent of employee contributions up to 3 percent of compensation, subject
to Internal Revenue Service (IRS) limitations. Additionally, the Midlantic Plan
sponsor may also make a discretionary matching contribution on the next 2
percent of compensation. For the year ended December 31, 1996, the Midlantic
Plan sponsor elected to contribute a discretionary match of 2 percent of
compensation of eligible participants which totaled $1,195,571.
All participant contributions to the Midlantic Plan are 100 percent vested
(nonforfeitable) at all times. For participants hired on or prior to April 1,
1993, any contributions made by the Midlantic Plan sponsor under the Midlantic
Plan are 100 percent vested. Participants hired after April 1, 1993 become
vested in the participating employer's matching contributions evenly over three
years of employment. Forfeitures are used to offset the employer discretionary
match in future periods.
Midlantic Plan income is allocated to participants based on an average
participant investment balance on a monthly basis. Under certain circumstances,
the Midlantic Plan permits withdrawals by participants.
All participant and Midlantic Plan sponsor contributions are held in a trust
fund (Trust). In addition, all distributions which participants did not elect to
receive in cash from the Midlantic Profit Sharing Plan, a predecessor plan, and
balances rolled over from any prior plans are held in the Trust. The
29
Midlantic Savings and Investment Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
Trust Department of PNC Bank, N.A., a wholly owned indirect subsidiary of PNC
Bank Corp., has been appointed to act as custodian and trustee of the Midlantic
Plan. The Trust is divided into seven funds for investment purposes: Fund A
(Compass Capital Growth Equity Portfolio), Fund B (Compass Capital Core Bond
Portfolio), Fund C (PNC Bank Corp. common stock), Fund D (Compass Capital Money
Market Portfolio), Fund E (Compass Capital Value Equity Portfolio), Fund F
(Compass Capital Short Government Bond Portfolio), and Fund G (Compass Capital
Balanced Portfolio). Each participant designates the funds into which his/her
share of the contributions will be invested.
Benefits to participants for distributions requested but yet to be paid
amounted to $16,330,805 and $7,298,625 as of December 31, 1996 and 1995,
respectively.
Although it has not expressed an interest to do so, PNC Bank has the right under
the Midlantic Plan to discontinue contributions at any time and to terminate the
Plan subject to the provisions of the Employee Retirement Income Security Act of
1974 (ERISA).
The summary plan description and plan agreement should be referred to for a
complete description of the Plan.
2. SIGNIFICANT ACCOUNTING POLICIES
VALUATION
Marketable securities are stated at fair value. Securities are valued at the
last public sale price of the securities listed on the New York Stock Exchange.
If no sales were reported, and in the case of securities traded over the
counter, the last bid price at the close of business is used. The value of any
security not listed or quoted on any exchange is determined by the last closing
bid price, reference to the bid price of any published quotations in common
use, or by the quotation of a reputable broker. For certain investments that do
not have an established fair value, such value is established based on the
opinion of the trustee.
The fair value of the shares in registered investment companies are based on
quoted redemption values on the last business day of the plan year.
The Midlantic Plan's assets are concentrated in the stock and bond markets.
Realization of the respective values shown on the statements of net assets
available for plan benefits is subject to the results of these markets.
30
Midlantic Savings and Investment Plan
Notes to Financial Statements (continued)
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
VALUATION (CONTINUED)
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying
notes. Actual results may differ from such estimates and such differences may
be material to the financial statements.
3. INVESTMENTS
The Midlantic Plan is comprised of investment funds representing both the
employer's and the participants' contributions. Records are maintained to
account for the noncontributory and the voluntary portion of each fund.
Net realized and unrealized appreciation (depreciation) in aggregate fair value
of investments was as follows:
NET REALIZED AND UNREALIZED
APPRECIATION (DEPRECIATION) IN FAIR
VALUE FOR YEAR ENDED
------------------------------------
DECEMBER 31
1996 1995
------------------------------------
Compass Capital Growth Equity Portfolio $ 1,848,500 $ 1,713,803
Compass Capital Core Bond Portfolio (186,601) 474,191
PNC Bank Corp. common stock 7,083,683 33,390,416
Compass Capital Value Equity Portfolio 2,714,185 1,970,201
Compass Capital Short Government Bond Portfolio (46,266) 175,744
Compass Capital Balanced Portfolio 141,472 62,997
Other - (50)
------------------------------------
$11,554,973 $37,787,302
====================================
31
Midlantic Savings and Investment Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The fair values of individual investments that represent 5 percent or more of
the Midlantic Plan's net assets are as follows:
DECEMBER 31
1996 1995
------------------------------------
Compass Capital Growth Equity Portfolio $10,582,043 $ 9,443,510
Compass Capital Core Bond Portfolio 5,529,284 5,973,714
PNC Bank Corp. common stock 49,354,479 53,231,585
Compass Capital Money Market Portfolio 11,983,158 9,472,135
Compass Capital Value Equity Portfolio 15,103,894 11,808,394
Compass Capital Short/Intermediate Fund - 4,855,079
Effective January 12, 1996, the Compass Funds were merged with the funds from
PNC Bank Corp. Such funds are administered and managed by wholly owned
subsidiaries of PNC Bank Corp. and its subsidiaries. The new funds are called
Compass Capital Funds and equate to the current Midlantic Corporation funds as
follows:
FORMER
MIDLANTIC CORPORATION PNC BANK CORP.
FUND COMPASS FUNDS COMPASS CAPITAL FUNDS
- ----------------------------------------------------------------------------------------------
A Growth Fund Growth Equity Portfolio
B Fixed Income Fund Core Bond Portfolio
D Cash Reserve Fund Money Market Portfolio
E Equity Income Fund Value Equity Portfolio
F Short/Intermediate Fund Short Government Bond Portfolio
G Balanced Fund Balanced Portfolio
32
Midlantic Savings and Investment Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The net assets available for plan benefits for the Midlantic Plan's investment
funds were either in Compass Capital mutual funds or PNC Bank Corp. common stock
as follows:
PNC BANK MONEY
GROWTH EQUITY CORE BOND CORP. COMMON MARKET
PORTFOLIO-- PORTFOLIO STOCK-- PORTFOLIO
FUND A FUND B FUND C FUND D
--------------------------------------------------------------
December 31, 1996
- -----------------
Investments at fair value:
PNC Bank Corp. common stock $ - $ - $49,354,479 $ -
Registered investment
companies
Compass Capital funds:
Growth Equity Portfolio 10,582,043 - - -
Core Bond Portfolio - 5,529,284 - -
Money Market Portfolio 333,109 315,482 1,605,864 8,976,284
Value Equity Portfolio - - - -
Short Government Bond
Portfolio - - - -
Balanced Portfolio - - - -
-----------------------------------------------------------
Total investments 10,915,152 5,844,766 50,960,343 8,976,284
Dividends receivable - - 906,741 -
Employer contribution
receivable 214,610 136,851 252,263 84,970
Due from broker for
securities sold 378,090 178,718 - -
Accrued income 1,558 1,442 6,258 40,133
-----------------------------------------------------------
Net assets available for plan
benefits $11,509,410 $6,161,777 $52,125,605 $9,101,387
===========================================================
SHORT
VALUE EQUITY GOVERNMENT BALANCED
PORTFOLIO BOND PORTFOLIO PORTFOLIO
FUND E FUND F FUND G TOTAL
------------------------------------------------------------
December 31, 1996
- -----------------
Investments at fair value:
PNC Bank Corp. common stock $ - $ - $ - $ 49,354,479
Registered investment
companies
Compass Capital funds:
Growth Equity Portfolio - - - 10,582,043
Core Bond Portfolio - - - 5,529,284
Money Market Portfolio 454,655 223,018 74,746 11,983,158
Value Equity Portfolio 15,103,894 - - 15,103,894
Short Government Bond
Portfolio - 4,389,764 - 4,389,764
Balanced Portfolio - - 1,339,985 1,339,985
------------------------------------------------------------
Total investments 15,558,549 4,612,782 1,414,731 98,282,607
Dividends receivable - - - 906,741
Employer contribution
receivable 372,752 98,254 35,871 1,195,571
Due from broker for
securities sold 385,945 171,282 - 1,114,035
Accrued income 2,224 1,308 288 53,211
------------------------------------------------------------
Net assets available for plan
benefits $16,319,470 $4,883,626 $1,450,890 $101,552,165
============================================================
33
Midlantic Savings and Investment Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
PNC BANK
GROWTH FIXED CORP. COMMON CASH
FUND-- INCOME FUND-- STOCK-- RESERVE FUND--
FUND A FUND B FUND C FUND D
-----------------------------------------------------------------
December 31, 1995
- -----------------
Investments at fair value:
PNC Bank Corp. common stock $ - $ - $ 53,231,585 $ -
Registered investment
companies
Compass Capital funds:
Growth Fund 9,443,510 - - -
Fixed Income Fund - 5,973,714 - -
Cash Reserve Fund 283,224 268,543 421,659 7,727,571
Equity Income Fund - - - -
Short/Intermediate Fund - - - -
Balanced Fund - - - -
-----------------------------------------------------------------
Total investments 9,726,734 6,242,257 53,653,244 7,727,571
Due from broker for
securities sold - - 656,342 -
Accrued income 175 160 291 9,371
-----------------------------------------------------------------
Total assets 9,726,909 6,242,417 54,309,877 7,736,942
Due to broker for securities
purchased 324,924 376,843 - -
-----------------------------------------------------------------
Net assets available for plan
benefits $9,401,985 $5,865,574 $54,309,877 $7,736,942
=================================================================
SHORT/
EQUITY INTERMEDIATE BALANCED
INCOME FUND-- FUND-- FUND--
FUND E FUND F FUND G TOTAL
-----------------------------------------------------------------
December 31, 1995
- -----------------
Investments at fair value:
PNC Bank Corp. common stock $ - $ - $ - $53,231,585
Registered investment
companies
Compass Capital funds:
Growth Fund - - - 9,443,510
Fixed Income Fund - - - 5,973,714
Cash Reserve Fund 555,822 176,948 38,368 9,472,135
Equity Income Fund 11,808,394 - - 11,808,394
Short/Intermediate Fund - 4,855,079 - 4,855,079
Balanced Fund - - 879,741 879,741
-----------------------------------------------------------------
Total investments 12,364,216 5,032,027 918,109 95,664,158
Due from broker for
securities sold - - - 656,342
Accrued income 301 114 19 10,431
-----------------------------------------------------------------
Total assets 12,364,517 5,032,141 918,128 96,330,931
Due to broker for securities
purchased 627,922 276,548 113,668 1,719,905
-----------------------------------------------------------------
Net assets available for plan
benefits $ 11,736,595 $4,755,593 $804,460 $94,611,026
=================================================================
34
Midlantic Savings and Investment Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The changes in net assets available for plan benefits for the Midlantic Plan's
investment funds were as follows:
PNC BANK MONEY
GROWTH EQUITY CORE BOND CORP. COMMON MARKET
PORTFOLIO-- PORTFOLIO STOCK-- PORTFOLIO
FUND A FUND B FUND C FUND D
-----------------------------------------------------------------
Year ended December 31, 1996
- ----------------------------
Net assets available for plan
benefits January 1, 1996 $ 9,401,985 $5,865,574 $54,309,877 $7,736,942
Additions:
Interest income 15,376 44,669 14,194 456,547
Dividends:
PNC Bank Corp - - 2,170,902 -
Others 43,999 323,205 - -
Contributions:
Employer 673,300 530,620 891,652 324,570
Employee 975,454 778,953 1,249,116 493,048
Rollover 9,486 6,317 309,604 4,823
Deductions:
Payments to participants
(cash) (2,082,442) (1,292,124) (5,575,427) (3,702,700)
Payments to participants
(stock) - - (2,909,158) -
Net transfers 623,752 82,867 (5,418,838) 3,468,354
Transfers from other plans - 8,297 - 319,803
Net realized and unrealized
appreciation (depreciation) 1,848,500 (186,601) 7,083,683 -
-----------------------------------------------------------------
Net assets available for
plan benefits at December
31, 1996 $11,509,410 $6,161,777 $52,125,605 $9,101,387
=================================================================
SHORT
VALUE EQUITY GOVERNMENT BALANCED
PORTFOLIO BOND PORTFOLIO PORTFOLIO
FUND E FUND F FUND G TOTAL
-----------------------------------------------------------------
Year ended December 31, 1996
- ----------------------------
Net assets available for plan
benefits January 1, 1996 $11,736,595 $4,755,593 $ 804,460 $ 94,611,026
Additions:
Interest income 80,723 34,614 13,725 659,848
Dividends:
PNC Bank Corp - - - 2,170,902
Others 306,849 225,858 27,188 927,099
Contributions:
Employer 1,250,007 397,017 114,066 4,181,232
Employee 1,749,728 524,167 153,728 5,924,194
Rollover 51,834 - 6,644 388,708
Deductions:
Payments to participants
(cash) (2,542,723) (1,201,359) (279,355) (16,676,130)
Payments to participants
(stock) - - - (2,909,158)
Net transfers 742,298 181,891 319,676 -
Transfers from other plans 229,974 12,111 149,286 719,471
Net realized and unrealized
appreciation (depreciation) 2,714,185 (46,266) 141,472 11,554,973
-----------------------------------------------------------------
Net assets available for
plan benefits at December
31, 1996 $16,319,470 $4,883,626 $1,450,890 $101,552,165
=================================================================
35
MIDLANTIC SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. INVESTMENTS (CONTINUED)
The changes in net assets available for plan benefits for the Midlantic Plan's
investment funds were as follows:
MIDLANTIC
FIXED CORPORATION/ CASH
GROWTH INCOME PNC BANK CORP. RESERVE
FUND-- FUND-- COMMON STOCK-- FUND--
FUND A FUND B FUND C FUND D
-----------------------------------------------------------------
Year ended December 31, 1995
- ----------------------------
Net assets available for plan
benefits January 1, 1995 $6,131,219 $3,482,273 $22,011,274 $6,670,017
Additions:
Interest income 3,075 2,346 7,572 383,390
Dividends:
Midlantic Corporation - - 1,001,430 -
Others 59,198 250,274 - -
Contributions:
Employer 765,557 755,814 1,086,967 447,460
Employee 982,475 987,239 1,350,907 566,124
Rollover 75,578 61,080 94,320 25,225
Deductions:
Payments to participants
(cash) (411,071) (237,997) (1,711,633) (792,409)
Payments to participants
(stock) - - (751,443) -
Administrative expenses - - (34,279) -
Net miscellaneous receipts
and (disbursements) (1) (172) 1,698 1,289
Net transfers 82,152 90,526 (2,137,352) 435,846
Net realized and unrealized
appreciation (depreciation) 1,713,803 474,191 33,390,416 -
-----------------------------------------------------------------
Net assets available for
plan benefits at December
31, 1995 $9,401,985 $5,865,574 $54,309,877 $7,736,942
=================================================================
EQUITY SHORT/
INCOME INTERMEDIATE BALANCED
FUND-- FUND-- FUND--
FUND E FUND F FUND G OTHER TOTAL
---------------------------------------------------------------------------
Year ended December 31, 1995
- ----------------------------
Net assets available for plan
benefits January 1, 1995 $ 5,356,823 $3,447,702 $ - $4,155 $47,103,463
Additions:
Interest income 4,465 1,898 223 115 403,084
Dividends:
Midlantic Corporation - - - - 1,001,430
Others 165,093 227,850 14,924 - 717,339
Contributions:
Employer 1,506,509 536,047 87,728 - 5,186,082
Employee 1,955,062 701,668 110,117 - 6,653,592
Rollover 116,500 9,435 44,991 - 427,129
Deductions:
Payments to participants
(cash) (476,548) (249,918) (1,519) - (3,881,095)
Payments to participants
(stock) - - - - (751,443)
Administrative expenses - - - (1,375) (35,654)
Net miscellaneous receipts
and (disbursements) (172) - - (2,845) (203)
Net transfers 1,138,662 (94,833) 484,999 - -
Net realized and unrealized
appreciation (depreciation) 1,970,201 175,744 62,997 (50) 37,787,302
---------------------------------------------------------------------------
Net assets available for
plan benefits at December
31, 1995 $ 11,736,595 $4,755,593 $804,460 $ - $94,611,026
===========================================================================
36
Midlantic Savings and Investment Plan
Notes to Financial Statements (continued)
4. SUBSEQUENT EVENTS
On January 1, 1997, the Midlantic Savings and Investment Plan was merged with
PNC Bank Corp.'s Incentive Savings Plan.
5. TRANSACTIONS WITH PARTIES-IN-INTEREST
The asset management group of PNC Bank, N.A., a wholly owned indirect subsidiary
of PNC Bank, administers the plan assets, maintains discretionary investment
power, and is the safekeeping agent. PNC Bank pays administrative costs incurred
by the Midlantic Plan. The Midlantic Plan also holds shares of registered
investment companies (Compass Capital Funds, formerly PNC Funds) which are
sponsored and administered by wholly owned subsidiaries of PNC Bank or its
subsidiaries.
6. INCOME TAX STATUS
The Midlantic Plan has received a favorable letter of determination from the IRS
dated June 2, 1995 which states that the Plan qualifies under Section 401(a) of
the Internal Revenue Code. The Plan Administrator is not aware of any events or
actions that have occurred in the operation of the Midlantic Plan that would
result in its disqualification.
37
Midlantic Savings and Investment Plan
Schedule of Assets Held for Investment
December 31, 1996
UNITS/ FAIR
DESCRIPTION OF INVESTMENT SHARES COST VALUE
- -------------------------------------------------------------------------------------------------------------
Compass Capital Funds:
Growth Equity Portfolio (Fund A) 716,455 $ 8,614,575 $10,582,043
Core Bond Portfolio (Fund B) 571,798 5,496,448 5,529,284
Money Market Portfolio (Fund D) 11,983,158 11,983,158 11,983,158
Value Equity Portfolio (Fund E) 1,065,155 15,201,346 15,103,894
Short Government Bond Portfolio (Fund F) 445,209 4,376,241 4,389,764
Balanced Portfolio (Fund G) 86,618 1,257,948 1,339,985
---------------------------------
46,929,716 48,928,128
Common Stock:
PNC Bank Corp. common stock (Fund C) 1,301,315 17,744,532 49,354,479
---------------------------------
Total $64,674,248 $98,282,607
=================================
38
Midlantic Savings and Investment Plan
Schedule of Reportable Transactions
December 31, 1996
FAIR VALUE OF
INVESTMENTS ON NET
UNITS/ PURCHASE SELLING COST OF TRANSACTION GAIN
DESCRIPTION OF INVESTMENT SHARES PRICE PRICE INVESTMENTS DATE (LOSS)
- ----------------------------------------------------------------------------------------------------------------------
Category (iii)--Series of securities transactions in excess of 5% of plan assets
- --------------------------------------------------------------------------------
Compass Capital Money Market
Portfolio 41,869,954 $41,869,954 $ - $41,869,954 $41,869,954 $-
Compass Capital Money Market
Portfolio 40,621,241 - 40,621,241 40,621,241 40,621,241 -
There were no category (i), (ii), or (iv) reportable transactions during 1996.
39
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, PNC Bank Corp. has duly caused this amendment to
be signed on its behalf by the undersigned, thereunto duly authorized.
PNC BANK CORP.
(Registrant)
By /s/ ROBERT L. HAUNSCHILD
--------------------------
Robert L. Haunschild
Senior Vice President and
Chief Financial Officer
Date: June 30, 1997
40
EXHIBIT INDEX
3.1 Articles of Incorporation of the Corporation, as amended, incorporated
herein by reference to Exhibit 99.1 and 99.2 of the Current Report on
Form 8-K dated October 7, 1996.
3.2 By-Laws of the Corporation, as amended, incorporated herein by
reference to Exhibit 4.2 of the Corporation's Registration Statement
on Form S-8 at File No. 33-62311.
4.1 Instruments defining the rights of holders of long-term debt of the
Corporation and its subsidiaries are not filed as Exhibits because the
amount of debt under each instrument is less than 10 percent of the
consolidated assets of the Corporation. The Corporation undertakes to
file these instruments with the Commission on request.
4.2 Designation of Series: $1.80 Cumulative Convertible Preferred Stock --
Series A, incorporated herein as part of Exhibit 3.1.
4.3 Designation of Series: $1.80 Cumulative Convertible Preferred Stock --
Series B, incorporated herein as part of Exhibit 3.1.
4.4 Designation of Series: $1.60 Cumulative Convertible Preferred Stock --
Series C, incorporated herein as part of Exhibit 3.1.
4.5 Designation of Series: $1.80 Cumulative Convertible Preferred Stock --
Series D, incorporated herein as part of Exhibit 3.1.
4.6 Designation of Series: Fixed/Adjustable Rate Noncumulative Preferred
Stock - Series F, incorporated herein as part of Exhibit 3.1.
10.1 Supplemental Executive Retirement Income and Disability Plan of the
Corporation, incorporated herein by reference to Exhibit 10.2 of the
Annual Report on Form 10-K for the year ended December 31, 1990 ("1990
Form 10-K").*
10.2 Amendments to Supplemental Executive Retirement Income and Disability
Plan, filed as Exhibit 10.2 to the 1996 Form 10-K.*
10.3 Supplemental Executive Life Insurance and Spouse's Benefit Plan of the
Corporation, incorporated herein by reference to Exhibit 10.3 of the
1990 Form 10-K.*
10.4 November 21, 1996 Amendment to Supplemental Executive Life Insurance
and Spouse's Benefit Plan, filed as Exhibit 10.4 to the 1996 Form
10-K.*
10.5 1992 Long-Term Incentive Award Plan of the Corporation ("1992 Award
Plan"), incorporated herein by reference to Exhibit 4.3 of the
Corporation's Registration Statement on Form S-8 at File No. 33-54960.*
10.6 Form of Nonstatutory Stock Option Agreement under 1992 Award Plan,
filed as Exhibit 10.6 to the 1996 Form 10-K.*
10.7 Form of Incentive Share Agreement under 1992 Award Plan (June 1995),
as amended November 21, 1996, filed as Exhibit 10.7 to the 1996 Form
10-K.*
10.8 PNC Bank Corp. 1994 Annual Incentive Award Plan, incorporated by
reference to Exhibit 10.6 of the Annual Report on Form 10-K for the
year ended December 31, 1994 ("1994 Form 10-K").*
10.9 PNC Bank Corp. 1996 Executive Incentive Award Plan, incorporated by
reference to Exhibit 10.2 of the Quarterly Report on Form 10-Q for the
quarter ended September 30, 1996 ("3Q 1996 Form 10-Q").*
10.10 PNC Bank Corp. and Affiliates Deferred Compensation Plan, incorporated
by reference to Exhibit 4.2 to the Corporation's Registration
Statement on Form S-8 at File No. 333-18069.*
10.11 PNC Bank Corp. Supplemental Incentive Savings Plan, as amended,
incorporated by reference to Exhibit 4.1 to the Corporation's
Registration Statement on Form S-8 at File No. 333-18069.*
41
10.12 PNC Bank Corp. Supplemental Pension Plan, as amended, filed as Exhibit
10.12 to the 1996 Form 10-K.*
10.13 1992 Director Share Incentive Plan, incorporated herein by reference
to Exhibit 10.6 of the Annual Report on Form 10-K for the year ended
December 31, 1992.*
10.14 PNC Bank Corp. Directors Retirement Plan, incorporated by reference to
Exhibit 10.7 of the 1994 Form 10-K.*
10.15 PNC Bank Corp. Directors Deferred Compensation Plan, incorporated by
reference to Exhibit 10.1 of the 3Q 1996 Form 10-Q.*
10.16 Employment Agreement dated as of December 29, 1995, between the
Corporation and Garry J. Scheuring, incorporated by reference to
Exhibit 10.7 of the 1995 Form 10-K.*
10.17 Form of Change in Control Severance Agreement, filed as Exhibit 10.17
to the 1996 Form 10-K.*
10.18 Amended and Restated Trust Agreement between the Corporation, as
Settlor, and NationsBank, N.A., as Trustee, filed as Exhibit 10.18 to
the 1996 Form 10-K.*
11 Calculation of Primary and Fully Diluted Earnings Per Share, filed as
Exhibit 11 to the 1996 Form 10-K.
12.1 Computation of Ratio of Earnings to Fixed Charges, filed as Exhibit
12.1 to the 1996 Form 10-K.
12.2 Computation of Ratio of Earnings to Combined Fixed Charges and
Preferred Dividends, filed as Exhibit 12.2 to the 1996 Form 10-K.
13 Excerpts from the Annual Report to Shareholders for the year ended
December 31, 1996, filed as Exhibit 13 to the 1996 Form 10-K. Such
Annual Report, except for those portions thereof that are expressly
incorporated by reference herein, is furnished for information of the
SEC only and is not deemed to be "filed" as part of this Form 10-K.
21 Schedule of Certain Subsidiaries of the Corporation, filed as Exhibit
21 to the 1996 Form 10-K.
23.1 Consent of Ernst & Young LLP, independent auditors for the
Corporation, filed as Exhibit 23 to the 1996 Form 10-K.
23.2 Consent of Ernst & Young LLP, independent auditors for the PNC Plan
and the Midlantic Plan, filed herewith.
24.1 Power of Attorney of certain directors and officers of the
Corporation, filed as Exhibit 24.1 to the 1996 Form 10-K.
24.2 Power of Attorney of Robert N. Clay, filed as Exhibit 24.2 to the 1996
Form 10-K.
24.3 Power of Attorney of Jackson H. Randolph, filed as Exhibit 24.3 to the
1996 Form 10-K.
24.4 Power of Attorney of Vincent A. Sarni, filed as Exhibit 24.4 to the
1996 Form 10-K.
27 Financial Data Schedule, filed as Exhibit 27 to the 1996 Form 10-K.
____________________________________________
* Denotes management contract or compensatory plan.
42